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November 11, 2001 at 07:00 PM
In DI, Its Full and Accurate Disclosure Of Ailments That Counts
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The vast majority of disability income claims are resolved easily and with little fanfare. However, public attention tends to focus on the difficult, litigious and declined claims that sometimes occur.
The discrepancy between the two trends presents challenges for agents.
All too often, as insurers try to sort out legitimate from bogus claims, we agents find ourselves struggling to balance our relationship with the insurer and our relationship with the insured. This isnt always easy to do.
However, if we fulfill our role properly, the claims process can go much easier and our clients will be more certain to receive the benefit they purchased.
What is it that we should do, to assure that the claim goes smoothly? There are certain key steps that are most likely to help–steps we should take before the event as well as after. In fact, I believe the agents most vital role in this area is what he or she does before coverage is ever placed.
You see, when selling a disability income policy, the biggest favor an agent can do for the client is to establish the need for honesty.
Certainly, it is possible–even easy–for a client or agent to omit an ailment and not have it discovered during underwriting. That can happen even when a companys best underwriter is on the case.
Without question, a client may end up with a better underwriting offer this way. But incomplete apps set the stage for problems down the road, for it is almost certain the undisclosed ailment will be uncovered in a claim investigation, even several years later.
Remember, claim files are loaded with physician records, reports from the Medical Information Bureau, questionnaires and numerous other pieces of investigation material used to make claim decisions. Even if the omitted ailment is not directly associated with the claim, any purposeful misstatement on an application can be grounds for denial.
Is it worth the risk, then, to withhold such medical details? I think not.
Yes, full and accurate disclosure may lead the insurer to add a rider to the DI contract or to offer a DI policy that is more expensive than the one sought. But your careful documentation up front means that the benefits will be there for the client, when needed.
The second favor an agent can do for the client is to take a good application. The majority of difficult DI claims, and for that matter, lawsuits brought against agents and carriers, occur because the agent was simply sloppy and/or inaccurate.
